... both of you for being here with us.
Yeah, thanks for having us.
Sure.
Good to see you.
I guess normally, we'd start with sort of the category and top-line trends, and I'm sure we'll get to that shortly. But maybe we can start a little differently and talk about the supply chain transformation and CapEx cycle that really ramped up last year and continued into 2025. You've been outgrowing the category, partially driven by your investments in A&C and distribution, that are funded by the supply chain productivity and CapEx. How do you feel about the progress on the manufacturing network transformation and the path from here?
And relative to other packaged food companies, I guess, where does your supply chain stand in terms of efficiencies and whatnot at this stage?
Yeah, look, I appreciate the question. I think we feel really good about the work we've been doing in the supply chain and sort of over the last couple of years. If you went all the way back to our Investor Day, we basically explained that, you know, we had 15, 16 plants total, and that we thought that over time we could actually drive that overall plant network down to become a little bit more to standard. And over that period of time, we also did a transaction where we sold a few plants and a couple of brands, and that actually necessitated us pulling forward some of the capital investments.
So we spent $100 million last year, and we're guided something similar this year and, you know, feel like we're making a lot of progress, and it's translating into the productivity path that we've had. You know, we're 6% of COGS last year, and we are on path to do the same again, as we go into next year. I think when you get to the end of sort of 2026, you know, the network will be relatively set for where we wanna be, and then we'll move more into a more maintenance and sort of standard capital structure. So far, so good.
I think we've done a lot of work to get there, and, you know, we're very proud of what we've built and, very proud of kind of where we are to be able to now start to drive the westward expansion and the geographies that you're seeing.
Yep. Understandably, you know, the CapEx has been a bit of a drag on free cash and certainly represented a significant investment cycle. You mentioned you also accelerated CapEx, so what's the CapEx path from here?
Yeah. Look, I think it's a very fair question. I think we talked about peak CapEx this past year, and obviously, it is impacting sort of the cash flow as we've gone. I think it is, again, important to know that we're a couple of years ahead of schedule on that plant consolidation, and we've said that we're at sort of peak CapEx as we're in this year. I think what you'll see as we go into next year and the years beyond is you'll start to see a step down in the amount of capital that we're spending.
And, you know, I think it's fair to say, you know, there will be a significant step down next year. I think CapEx will probably start with a seven-
Mm-hmm
... next year, and then the year after, you'll see the next step down after that.
Great. And since we're on the topic of, I guess, supply chain transformation, can we touch on the productivity program? It'll be about 6% of cost of goods in 2025. This will be the second consecutive year near this level of, of savings. How much opportunity remains with respect to productivity, and should investors be thinking about the next year or two being around that elevated 6% level, and, and where lie the greatest opportunities from here?
Yeah, so I think I'll start, and then I'll hand it over to BK to give you a little bit more. You know, if you went back to my first year in the role, we wound up getting to about 4% cost of goods, and then we stepped up to 6% last year.
That was from... And prior to you being there, it was, like, one.
Yeah, I think we-
Yeah.
I think we finished at 2% the first year before me, and so, you know, obviously, a lot of early stages in terms of the productivity program, and, you know, we're not doing anything exotic per se. We started to look at our procurement structure, we started to look at our costing models, and we actually were able to drive efficiency within the box and then with the number of boxes that we went to, so that stepped up from 4%-6%, 6% again this year.
And then I think, you know, we'll start to move toward maturity, but I think you're starting to see the benefit of all that capital and the work we've been doing in building capabilities in order to actually start to deliver the gross margin expansion I think we all aspired and hoped for in the category, that then funds the A&C and capability building. But BK?
Yeah, sure. So I think the first thing is the 6% was a quite remarkable number for us, and we're very proud of that. I think it's really driven, as Howard just said, around the CapEx. If you go back to even the second half of last year and the first half of this year, our CapEx really ramped up. It'll ramp down here in the second half, and as Howard said, it'll moderate significantly next year. But those benefits really drove the productivity piece. Also, and more discreetly, you know, we did announce a facility closure of Grand Rapids that'll happen here in late Q4, and we'll see some of those benefits this year and some benefits next year. But I think that's been very, very helpful. I think we'll normalize productivity around 3%-4%.
We'll always be able to cover our inflation, and as Howard said, be able to invest in our brands appropriately. But I think in 2026, you know, we'll talk about those building blocks when we get there, but we may see productivity just be a bit elevated off of that baseline.
Great. Maybe it's a good time to transition to sort of the category and sales trends. I think a good place to start is what's driving the well above category growth rates at Utz. I guess despite the continued struggles for the broader salty snack category, which we'll get into later, you know, the company's been able to deliver relatively robust organic sales growth. Two key drivers of this outgrowth, right, are Boulder Canyon and the expansion geographies.
Yeah.
Maybe walk us through a bit, the opportunities from these two key levers going forward.
Yeah, I mean, so, look, I think we're very happy with our top line this year. You know, we got to a... We've gotten to sort of a rhythm where we're starting to grow the way I think we all would've expected to in years past. We did some portfolio shaping and some cleanup, which I think is now allowing our Power Brands and our brands overall to that growth to come through.
Boulder Canyon obviously has been a great contributor to our top-line sales, and it's sort of a perfect combination of the trend around non-seed oil, a trend toward consumer shopping for premium, and also looking for value.
And so, you know, we promised that we would get to $100 million by the end of next year.
We passed $100 million at the end of last year, and, look, we expect to be closer to $200 million as we get into the year-end. So, you know, obviously a business that is doubled over the last period of time and continues to be growing really nicely with both its natural channel and natural organic channel, but also entering into the conventional channel and growing both velocity and distribution simultaneously in both. So that, you know, is something we have a lot of high hopes for and expectations.
On the expansion geographies, look, our promise was always to do our best to hold the core, and then to be able to expand and grow more. And a wise man once used that expression, and we have used it internally since.
Mm-hmm.
What you see right now is our distribution gains in our core have been around 10% into TDPs, and in expansion geographies, it's been more like 18%. That's been bringing our Utz Brand, Boulder Canyon, On The Border, and Zapp's into new markets-
Mm.
and be able to begin to demonstrate that our model can repeat itself, and the success we've had in Florida can actually transcend as we move westward, which, you know, you can certainly see in the growth rate. And I think we've got, you know, several more years of growth to come in that regard, regardless of what the category ultimately does.
Yeah. It's a idiosyncratic driver here to the story, for sure, that you know we don't see for many of the companies that we follow in the space. Maybe we can dive a bit deeper into both of these. I guess, regarding Boulder brand, as you mentioned, has already blown by its initial target to be $100 million retail sales brand. I guess in the next three years, how big could this brand be, and what would sort of be the key drivers of this outcome?
Yeah, so I probably... The couple of things that we are, we're most excited about Boulder is, again, I think if you, if you try the product, it's a non-seed oil, but there is no taste sacrifice. So you can, you know, feel great about serving it. It actually performs for the consumer that wants that, and there isn't something that you're like, "It's great. It's not as good as its conventional counterpart." It actually performs pretty much identically.
Yeah.
But more importantly, the brand itself has actually demonstrated some stretch, so we were able to enter into cheese balls. Last year, we entered into tortilla chips. We've actually expanded the range of offerings in a wavy, and we brought in some flavors as well as sour cream this year. And it continues to perform in every channel that we move into. You know, it'll be $200 million this year. Could it be $500 million?
I'm not quite sure we are ready to say that, but I think we believe that there's a lot of upside yet to go on that brand, and it will be a growing and much more significant piece of our portfolio as we continue to execute.
Not surprisingly, the success of the brand has attracted competition to the avocado oil space. I guess, how do you view the more competitive landscape, and how do you remain advantaged in this space?
Yeah, look, I think the root of our advantage is always going to be in the speed and agility with which we can react to the environment that we're in. And, you know, I think if you look at the competition, we love competition. We think the competition is healthy and important for the category, and I don't think that this space is yet, by any means, you know, limited at this point in terms of how much more area that avocado oil can grow.
So I think as competition comes in and introduces other consumers to the space and to the benefits of the oil, I think as the number one player in the segment right now, I think that does nothing but help us as we continue to drive adoption.
Yeah. Maybe switching gears to the white space distribution opportunities in expansion markets. At this stage, what's the key opportunity? Is it expanding the company's presence in FDM channels with new customers and increased shelf space, or is it expanding into other channels like club or convenience?
Yeah, it largely depends on what geography you're talking about. I think if you were to look at somewhere like Florida or some of our expansion geographies that are starting to mature, then clearly it is continuing to spread the channels that are being sold in.
Mm.
We typically will start with, in the food channel, when we enter into a market because there are large anchor customers who want and support our brands and give us the support that we're looking for, and then over a little bit of time, start to build out and proliferate into classes of trade. So C-store, as you know, is a place where we've talked a lot about over the last couple of years being an area of attention. It has been improving for us, but clearly, you know, there's some more work to do. As you look at expansion geographies, really, food and club and mass are the places that we look to go.
Typically entering with food, and then building out an IO network, and then filling in the rest of the channels because it tends to be the place where we can start to drive the revenue certainty we need to get our independent operators in and stood up.
In expansion markets where the company has cycled initial distribution gains, so Florida, as an example.
Yep.
I mean, what does growth look like, and how have you used that data to convince retailers in other new expansion markets to sort of take on the brand, where it's new to that space?
Yeah, I mean, obviously, Florida has been a wonderful success for us. It's something that I inherited when I joined the company, and what we have been able to see is we first got chain-wide in a large retailer, and then actually, over time, we're able to not only build the original core assortment, but broaden the assortment and bring more of our portfolio in, be able to invest more meaningfully in some of the merchandising and co-promotional opportunities that that merchant has, and then build out infrastructure around it.
We bought the IO network, or the national distribution rights back last year, as you look in Florida.
Mm-hmm.
You know, that has, I think, been a proven model for us. The nice thing is, in the 30 markets we're in, we're growing in all 30, and we're taking share, but a lot of the retailers that we would wanna talk to about entering into new geographies, we actually have existing business with them in other geographies. So they're actually able to look at their own data, and it's much more about, you know, talking about the shelf space and talking about the assortment and getting the preconditions right to be able to enter in and then continue to advance.
So it's a much better story when, like, we can all debate a lot of things, but when everyone's looking at the same data and it's coming from them, it's been very helpful.
Great. Maybe shifting gears to core markets. This past quarter, the company delivered both value and volume market share gains in core markets, where it already has very strong market share. I guess for the first time in several quarters, that was the case.
Yeah.
So what enabled this outcome, and would you expect this dynamic to continue going forward?
Yeah, so, you're right. I think there are a couple things that were happening in the core in the last quarter, and a couple of things that we've been talking about historically. One is around this notion around portfolio shaping, where we are actually able to now we've now brought in our Power Four brands. If you look at On The Border or Zapp's or Boulder Canyon, all of them had significant distribution gains in the quarter. So we're optimizing our mix, which was always part of the story.
And then the second is, you know, our convenience store channel trends, which had been a little bit softer over the last, you know, call it several quarters, actually started to improve. They're not yet where we want them to be, but convenience store tends to be supportive to our core market share.
We wanted to be at a zero. We were at basically 0.2 points of volume share in the quarter, and that was actually a welcome outcome of all the work we've been doing there.
You know, the white space opportunity that we've talked about in expansion markets is, is pretty clear. How would you contextualize the distribution opportunity that's still available in core?
Yeah, I think it's... I think our core markets are actually, again, have quite a bit to go. Because when we talk about the core, what we're really talking about is the Utz core, right? We're talking about the Utz Brand and kind of the distribution that it has, more so than we're talking about sort of the remaining Power Three and some of the other SKUs. So we have an opportunity to continue to bring Boulder Canyon, OTB, and Zapp's in. We have continued opportunity to bring innovation in as well, and to also play the price ladder with some of our assortment.
So I think, you know, there's still quite a bit of distribution opportunities for us within the core, which are really non-core for the rest of our branded portfolio, and then obviously the reciprocal is true as you think about the West.
I know that, you know, the summer back- to- school is a key timeframe for the salty snack category overall. What have you seen in of late in terms of category performance, and what is Utz seeing in terms of the competitive environment?
Yeah, I mean, I think the competitive environment has actually been pretty rational for us. I mean, you're not seeing any sort of unusual activity from any of the competitors, which has actually been great to see. You know, I think that this is a category that has historically been built on brand building, marketing, innovation, and then a rational promotional environment, and I think that is what you're seeing right now. And I think for us, that is always a positive tailwind when everybody is competing to build this business and build this category for the long term.
Salty snack category obviously has remained sluggish, probably a lot longer than anyone would have initially anticipated, and I think then longer than anyone really would like to see. I guess, what do you expect from the category for the remainder of this year?
Yeah.
And while early, are there reasons to believe the category could return to some, you know, modest form of growth in 2026? And then what are you expecting from the pricing environment in the back half of this year?
Yeah, look, so I mean, I think we've talked about this a little bit. I actually, I'm pretty positive on the salty snack category overall. I think if you look at the metrics that really truly matter over time, household penetration continues to grow, which would at least suggest to me and to us that consumers and shoppers want these items in their pantry. And I think that, you know, we've been a zero to one price and a three to four. I do this each time. A zero to one volume and a three to four price category.
I think obviously when inflation happened, the category got quite a bit of it ahead of itself, and I think we're just seeing some of that kind of work through, as we can, again, continue to build back into what builds this category. I think as you look at the back half, last year, we're anniversarying, I think, a much more competitive environment. So there was a sort of a step up in promotional activity in H2 of last year that kind of more or less carried over pretty consistently into H1 of this year.
There was no sort of, incremental step higher, and so I think you're gonna see a category that starts to normalize a bit as we go into the rest of the year, is kind of what I'm expecting.
And then I think longer term, I do think that being able to put price into this category is really about driving consumer engagement and value in the brands and the category that we support.
Last quarter, the company raised its outlook for organic sales growth for the full year, from up low single digit to up 2.5% or better, due to the first half sort of outperformance. What came in better than you expected in the first half? And the guidance implies a bit of a sequential deceleration in trends from the 3% result in the first half. What would be causing that?
Yeah, so I'll start, and I'll give it to BK. Look, I think if you look at our building blocks, we had said at least 2.5%, you know, 2.5% or better. And if you think about the distribution gains that we've had and sort of the strength of Boulder Canyon, I think we feel- continue to feel pretty good about that our drivers are in place. But, you know, the competitive environment is dynamic, and the category continues to evolve, and I think that we would expect that we should have a pretty good quarter and a pretty good year. But we're, I think, continuing to just watch what's happening and watch the adoption. BK?
Yeah, I think that's a good point. You know, we did say 2.5% or better, and what drove that is we thought we had some room, given the favorable lapse that we'll have in the second half here that Howard just mentioned. Howard expressed our view on the category, but I think overall, the category does have a bit of uncertainty to it. We want to continue to monitor that. And then the consumer macro trends are a bit of a debate as well. But I know everyone looks at our scanner data, and so I'll let that speak for itself, but we feel pretty positive on the top line for the year.
Yeah. Yeah. Maybe shifting to profitability. So on the EBITDA side, implied in the full year outlook is the expectation in the second half for EBITDA to grow at sort of a mid-teens level year over year, which would represent nearly two hundred basis points of year over year EBITDA margin expansion. I guess, what are the key drivers to this level of margin expansion in the back half?
Yeah, I think the first piece for us is that we expect the EBITDA to grow 100 b ps for the year, and our midpoint of our guide confirms that. EBITDA in our business model is always a bit back half loaded. I think last year we delivered 54% of EBITDA in the second half. This year, that number, to your point, is up higher at 57%. I think the productivity gains we've talked about is really the big driver for us. The CapEx we spent in the second half of last year and the first half of this year really is gonna drive the productivity.
You know, the things that we have in terms of our ability to be more efficient in the factory, putting in, you know, better equipment around palletizers, you know, taking out some of the labor pieces with automation. Those have all been very helpful. And this year, particularly, we had a discrete item in Q4 as we talked about our Grand Rapids closure. So all those will ramp nicely into a strong EBITDA close for the year.
Got it. And following a year in which the company expanded its A&C spend by some 60%, it's just planning for another sort of 40% year over year increase this year. As a percent of sales, what level of A&C will the company exit the year with? And do you still expect that target to be in a sort of 3%-4% of sales range in over time, and when would you expect to reach that level?
Yeah, I think the first thing I always wanna reiterate as we think about spending is, you know, A&C, you know, we're a branded business and we wanna continue to build and have healthy brands, but it's not an article of faith. We want to save money before we spend money. And so as the productivity has continued to ramp, it actually gave us some room last year to accelerate that A&C.
We are committed to get to, let's call it, 3%-4% over time, and that's sort of the sequential 40% that you're talking to. I think we'll end this year probably closer to around 2% of revenue, so we still have several more years of opportunity. And, you know, we talk about margin momentum and materiality.
We wanna spend it on our biggest businesses that we make money on, that actually have momentum, and as long as we can continue to do that, we think that the returns will be positive until we get to sort of a more normal state.
Yep. Net leverage ticked up to 4.1x this quarter, but it's maintained its expectation for net leverage to approach three times at fiscal year end. I guess, what happened in the quarter with respect to leverage, and why did Utz feel comfortable reaffirming its guidance?
Yeah, I think that's right, Andrew. Our leverage was higher. We had an opportunity to accelerate some of the CapEx spending, and that was driving our productivity program, so we took advantage of that. Also, the seasonality opportunity in our business, where we were able to build some additional working capital, will be helpful. I think, our original target, our Investor Day, was to be at three times net leverage at 2026.
Mm-hmm.
We did update that guidance to say we would approach three times here in twenty twenty-five. We think we're on track for that. Free cash flow will be the key. I talked about the EBITDA ramping up, being helpful to us. Howard also mentioned that CapEx is at our peak, and that will step down here in the second half, and I'll walk through building blocks of the future as we guide into next year, but it'll be a very important focus for us to really improve our free cash flow yield. You know, we're comfortable with our cash conversion cycle. It's pretty performs very well for us.
We think we can improve it on top of that, and then obviously, CapEx will be a really big driver of that as we go forward.
We'll do other things that you expect us to do around managing working capital and structurally reducing it. We have an integrated business plan program that will reduce inventory levels for us and all the things that you expect us to do around receivables and payables, but we feel very comfortable with our approach here.
I realize you're not giving any specifics about next year at this point, but maybe can you dimensionalize what sort of free cash acceleration we could see in fiscal 2026?
Yeah, it's probably too early for us to talk about it, but, as Howard said, you know, we expect CapEx to come down meaningfully. He said it'll have a seven handle. That's quite a bit different than the $100 million we'll spend this year, as we confirmed in our Q2 call. And we think along with that, our OpEx spend and our one-time friction costs will come down as well. So we do think there are some opportunity here to drive free cash flow. This is an important part of our story. We think in the future, and we'll come back and talk more about it, but our free cash flow yield will be a very big focus for us.
Okay, great. You know, the company's been pretty active in the M&A market over the years. Took a bit of a pause the past couple of years as it focused on sort of debt paydown. How much was the slower pace of M&A? It's a reflection of leverage, rather than maybe timing of deals? And should investors expect it to pick back up again, and what kind of assets would the company even target at this stage?
Yeah, look, I mean, I think a couple things, and we've maintained, you know, we'll look at everything, but we, you know, we've always had a high hurdle for things that we would be interested in acquiring. It always starts with: Do we think we would be good owners of it? And if there had been a gotta-have-it asset, then we would have looked at, you know, the balance sheet and the full force of what we could do. But obviously, paying down our debt was a priority. I think the more important thing is that we don't necessarily need an inorganic transaction to meet our growth goals.
We have so much growth opportunities, as you think about our expansion geographies, our A&C opportunities, the ability to build out our DSD network, that, you know, M&A has an even higher hurdle because it has to, by definition, take some of those resources away from the organic opportunity. I think as you look forward, I think there are a couple of areas. We've talked about meat and popcorn. Historically, you know, we tend to be good buyers after synergies. We're in the, you know, the mid-single digits in terms of what we're paying for it, and, you know, we'll continue to look, but...
I feel very good that our top-line momentum and the top line that we're chasing would only be enhanced if we were to do a deal, but it's not something by any stretch we need to do right now.
Right. You know, salsa and dips and partner brands have been sort of material headwinds to the top-line growth the past few quarters. What's your expectation for each of those going forward? And I guess when can we get to a point where they're really no longer a drag, which would only accelerate the type of growth that you're seeing on the top line from where it is already?
Yeah, I mean, for context, we're talking about 12% of the business-
Mm-hmm.
Right? And sort of equally split between dips and salsa and partner brands. You know, obviously, on partner brands, I'm not really qualified to say what the people that we are carrying products for are going to do, so let me spend more of the time on dips and salsa. You know, last year we had a distribution change. We'd had a large retailer who consolidated. We were in the Hispanic set and the conventional set. They consolidated into the conventional set, and so we had to lap that.
That largely has passed us through the end of the second quarter, leaked a little bit into the third quarter, then we had a little bit of merchandising timing in terms of some club channel activity that we had a year ago.
But you know, we think that those businesses are important, and we will restore them to growth. Right now, the other piece of it is that it's an area where the margins are not particularly strong, and we've been focused on margin improvement and pricing in that sub-segment. But I think if you were to look at the more recent scanner data, you're starting to see some improvement in those businesses, and you know, we would expect that to continue.
Got it. How is Utz performing in the convenience channel of late? I know this is an area where the company still sees opportunity, but, you know, it's been slower than desired, and I know part of that is the overall channel, but then part of it's been, you know, Utz's performance within it.
Yeah.
So where do we go from here in C- stores?
Yeah, I think, I think that's right. I think we had some assortment management choices and some distribution losses a couple of years ago that disproportionately affected the business. So while the convenience store... While the convenience channel had actually slowed, we slowed even more.
I think if you were to look at the most recent periods, there are a couple of the larger chain accounts where you see the distribution gains, and you actually see top-line growth, and I think the channel overall is improving, so while we're not yet too bright, I think you're seeing a you know, an improvement in the trend, and we would expect to be around flattish before the end of the year.
Great. Bill, having now been in the CFO seat for about a quarter, or so, I mean, what have been your biggest takeaways so far? Because you've been in a number of CFO roles in the industry, both public and private.
Yeah, I'm happy to be at Utz. It's been a great opportunity for me. I think my first observation is that, you know, we have a very clear strategy, and it's working. I think as we talked about, you know, using our productivity gains to drive our wonderful brands and expansion, that's on track. I think the other work is, you know, the team's work on productivity in particular has really been best in class from my perspective, and the brand-building opportunities are very strong there as well.
And then, you know, finally, for me personally, I'm working with the team to bring forward just new capabilities, particularly in the areas around technology, particularly in the support functions and around the DSD model. I think we can be helpful there as we go forward.
But just to be able to be here, obviously. I've known Howard, you know, for years now, since our days at Kraft Heinz, and it's been a good opportunity for me.
Yep. Howard, maybe in our sort of remaining moments, I mean, when you were first brought on board, the thinking was that this would be a new stage of growth for Utz, moving from more of a DSD-led sort of push model to more of a marketing and innovation driven, more of a hybrid consumer push-pull model. Obviously, the environment's changed meaningfully in the last couple of years, but I guess, how would you characterize Utz's performance in these areas over the last couple of years?
And do you have confidence that the company is set up for continued volume gains, even when distribution white space opportunities sort of eventually wind down?
Yeah. Look, I think when I got here, there were a couple of mandates that we were trying to build, and I think this was an incredibly well-run company, and it was a company that had been built over, you know, a generation of, you know, pushing into new geographies and moving quickly and being willing to take entrepreneurial risks in the pursuit of and building scale. And then the question was, how do you then take that scale and make it really beneficial?
Yeah.
And so, you know, I do think that we've always said, I think, whether you call it 70/30, push versus pull, or 60/40, that you know, over time, once we get to the point where all of the consumers understand and can have the availability, that people have to want and desire these brands. And so, spent a lot of time building a marketing function and building analytic capabilities and forecasting capabilities, revenue management, all the things that you would expect to see. And I think what I'm particularly proud of is that our communication plan is on track and that our innovation agenda is also on track.
You know, once you get to national distribution, you can actually take bigger bets in innovation and growth, and I think we're pretty much where we wanna be with those capabilities, and we're starting to kind of show it in kind of in our results and kind of where we are. I think our brand builders are doing a great job of understanding the consumer in ways they haven't before.
We were talking about lemonade chips earlier with some folks, and you know, it was something that I probably would not have done on my own, but they had evidence and data and facts that said the consumer would actually respond really well, and it which has clearly been a wonderful success for us, and the consumer response and the buzz that we got for it was great.
We're much better in digital and online now than we've ever been before, and you know, we still have a relatively modest A&C budget with an opportunity to spend a whole lot more.
Yeah. I'm curious, you know, as one of the only sort of large mainstream salty snack players that's really driving growth in a more sluggish category right now.
Mm-hmm.
I'm curious how your meetings with, your top-to-top meetings with key retail customers have gone as a key player that's driving growth for them.
Yeah.
How do those conversations go, and are you able to sort of take this moment and say, "Hey, we're the one driving growth that should translate into either more TDPs or better shelf placement?" I know, maybe some examples or whatever you can share on that front.
Yeah, look, I, I think for sure the conversation is different, right? I, I think if you went back a few years ago, the question was, "Are you a regional brand, and can you move westward?" And the answer we had was, "Yes, we can move westward," and we've done that. I think, you know, we were growing Boulder Canyon, and could you actually get to a number one share position in natural? And we did that. And so I think that the retailers are now much more willing to give us the challenge of, "What else can we do to grow together," as opposed to, "Prove to us that you can grow.
Mm-hmm.
That, I think, is manifesting itself in participation in bigger programs with them. You know, we're a nice-sized business, but, you know, there are programs that we're being included in that, you know, I'm not necessarily sure that our size in the category would have necessarily demanded-
Mm-hmm
... a couple of years back. And you're certainly seeing them, giving us more distribution space, which is the highest compliment any merchant can give you, is to say, "I'm gonna put more of your products on, on the shelf.
Yeah.
So I think from here, the biggest difference is we're being asked our opinion-
Mm-hmm
... and we're being asked to actually demonstrate some category leadership that we've spent three years trying to build to be ready for those questions. And you know, we're. When you went from being in the mid-tier to moving toward a top-tier supplier, the expectations are that you'll have a point of view and that you'll help drive the growth. And you know, our retailers have been, and our IOs, incredible partners.
Great. All right, I think that's a great point to take it over to the breakout session. Thank you both for being here. Please join me in thanking Howard and Bill for being here.
Thank you.